Section 201(1) of the Income Tax Act

Income-tax Act, 2025: s.398

Section 201(1) falls under section 201 of the Income-tax Act, 1961, which corresponds to section 398 (Consequences of failure to deduct or pay or, collect or pay) of the Income-tax Act, 2025.

Read section 398 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 201(1) is Kourani v. Union OF India (83 Taxmann.com 137), cited in 1,708 of the 3,835 judgments on BharatTax that turn on this section.

Leading authorities on Section 201(1)

Kourani v. Union OF India
83 Taxmann.com 137 · 2017 · High Court
1,708
citing judgments

The fee under Section 234E for late filing of TDS/TCS statements cannot be levied retrospectively by processing an intimation under Section 200A for defaults occurring before the amendment allowing such processing.

Fateh Raj Singhvi & Ors. v. UOI
289 CTR 602 · 2016 · High Court
844
citing judgments

A fee under Section 234E cannot be levied or adjusted in an intimation under Section 200A for TDS statements pertaining to periods prior to June 1, 2015, as the enabling amendment to Section 200A(1)(c) came into effect only from that date.

Rashmikant Kundalia v. Union of India
54 Taxmann.com 200 · 2015 · High Court
702
citing judgments

Section 234E, levying late fees for delayed filing of TDS statements under section 200(3), is constitutionally valid and constitutes a compensatory fee, not a punitive penalty. Before treating any person as an assessee-in-default, an opportunity of being heard must be provided.

GE India Technology Centre Pvt. Ltd. v. CIT
327 ITR 456 · 2010 · Supreme Court
663
citing judgments

Tax must be deducted at source from payments made to a non-resident under Section 195 only if such payment is chargeable to tax in India. The Assessing Officer bears the onus to establish that the payments made are indeed chargeable to tax under the Income Tax Act.

Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT
293 ITR 226 · 2007 · Supreme Court
576
citing judgments

The deductor cannot be treated as an assessee-in-default under Section 201(1) if the deductee has already paid the tax or offered the impugned receipts in their return of income. However, interest under Section 201(1A) for delayed deposit of tax can still be levied up to the date of filing of the return of income by the deductee.

Gajanan Constructions v. DCIT
74 Taxmann.com 6 · 2016 · ITAT
465
citing judgments

Late fees under section 234E can only be levied prospectively from June 1, 2015. Levying late fees for periods prior to this date is not permissible.

Dundlod Shikshan Sansthan v. Union of India
63 Taxmann.com 243 · 2015 · High Court
397
citing judgments

The imposition of fees for late filing of TDS/TCS returns prior to the Finance Act, 2015 amendments was not illegal, and the Rajasthan High Court found no justification to interfere with such compensatory fees.

CIT v. Ansal Land Mark Township (P) Ltd.
377 ITR 635 · 2015 · High Court
369
citing judgments

The second proviso to Section 40(a)(ia), introduced by the Finance Act, 2012, is curative and applies retrospectively from April 1, 2005. Consequently, if the recipient of a payment has filed their return and paid taxes on the amount from which tax was not deducted at source, the payer's expenditure cannot be disallowed under Section 40(a)(ia).

Sree Narayana Guru Smaraka Sangam Upper Primary School v. Union of India and Others
392 ITR 457 · 2017 · High Court
217
citing judgments
137 (Guj.) IV. Qatalys Software Technologies (P.) Ltd. v. UOI
115 Taxmann.com 345 · 2020 · High Court
178
citing judgments

The Madras High Court has upheld the validity of the levy of fees under Section 234E and penalties under Section 271H, finding the charging provision to be Section 234E, with the power to levy existing from 01/07/2012.

Judgments on Section 201(1)

State Bank of India, Mumbai vs. Assistant Commissioner of Income Tax, TDS, TDS Circle 2(2), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3841/MUM/2026[2016-17]Status: DisposedITAT Mumbai09 Sept 2026AY 2016-17

Bench: Shri Om Prakash Kant & Shri Pawan Singh(Physicalhearing) State Bank Of India Acit, Tds, Tds Circle – 2 (2), Branch Jogeshwari East, Vs Mumbai, Room No. 303, 3Rdfloor, Dastur Bldg., Caves Road, Cumballa Hill Mtnl Te Building, Jogeshwari East, Mumbai – 400060. Pedder Road, Dr. Gopalrao Tan:Mums2678D Deshmukh Marg, [Pan: Aaacs8577K] Mumbai – 400026. Appellant / Assessee Respondent / Revenue State Bank Of India, Ito Tds, Tds Ward 2, Thane Thane Jekegram Branch, Vs Mumbai, Ground Floor, 463, Jai Commercial Complex, Reac, Thane, Jk Gram, Khopat Pokhran Road No. Maharashtra – 400602. 1, Thane – 400601, Thane. Tan: Pnes10300D [Pan: Aaacs8577K] Appellant / Assessee Respondent / Revenue Assessee By Shri Dinesh Nair, Ca (Virtually) Revenue By Shri Rajgopal Parthasarathi, Sr. Dr Date Of Hearing 23.07.2026 & 06.07.2026 Date Of Pronouncement 09.09.2026 Order Under Section 254(1) Of Income Tax Act Per Pawan Singh: 1. These Two Appeals Are Filed By Two Different Branch / Entities Of State Bank Of India Against The Separate Orders Of The Learned Cit(A), Both For Assessment Year 2016-17. Though, The Appeals Were Heard On Different Dates, Yet, Based On A Similar Set Of Facts & Having Common Grounds Of Appeal, Therefore, Both The Appeals Are Decided By A Common Order. To Appreciate The Facts, The Facts In Ita No. 3841/Mumbai/2026 Is Treated As The Lead Case. The Decision

Section 192Section 254(1)

State Bank of India Thane Jekegram Br, Thane vs. ITO TDS, TDS Ward 2, Thane

In the result, the appeal of the assessee is allowed

ITA 2221/MUM/2026[2016-17]Status: DisposedITAT Mumbai09 Sept 2026AY 2016-17

Bench: Shri Om Prakash Kant & Shri Pawan Singh(Physicalhearing) State Bank Of India Acit, Tds, Tds Circle – 2 (2), Branch Jogeshwari East, Vs Mumbai, Room No. 303, 3Rdfloor, Dastur Bldg., Caves Road, Cumballa Hill Mtnl Te Building, Jogeshwari East, Mumbai – 400060. Pedder Road, Dr. Gopalrao Tan:Mums2678D Deshmukh Marg, [Pan: Aaacs8577K] Mumbai – 400026. Appellant / Assessee Respondent / Revenue State Bank Of India, Ito Tds, Tds Ward 2, Thane Thane Jekegram Branch, Vs Mumbai, Ground Floor, 463, Jai Commercial Complex, Reac, Thane, Jk Gram, Khopat Pokhran Road No. Maharashtra – 400602. 1, Thane – 400601, Thane. Tan: Pnes10300D [Pan: Aaacs8577K] Appellant / Assessee Respondent / Revenue Assessee By Shri Dinesh Nair, Ca (Virtually) Revenue By Shri Rajgopal Parthasarathi, Sr. Dr Date Of Hearing 23.07.2026 & 06.07.2026 Date Of Pronouncement 09.09.2026 Order Under Section 254(1) Of Income Tax Act Per Pawan Singh: 1. These Two Appeals Are Filed By Two Different Branch / Entities Of State Bank Of India Against The Separate Orders Of The Learned Cit(A), Both For Assessment Year 2016-17. Though, The Appeals Were Heard On Different Dates, Yet, Based On A Similar Set Of Facts & Having Common Grounds Of Appeal, Therefore, Both The Appeals Are Decided By A Common Order. To Appreciate The Facts, The Facts In Ita No. 3841/Mumbai/2026 Is Treated As The Lead Case. The Decision

Section 192Section 254(1)